Activin is a member of the TGF-beta superfamily of cytokines and exhibits a large variety of biological activities. Studies on the regulation of activin function are not only important for understanding the physiological activities of activin, but also helpful for future research on potential clinical application when modification of activin function is beneficial to the patient. Our preliminary studies showed that Smad7 is a novel intracellular regulator of activin signaling. The objective of this proposal is to determine the molecular mechanisms underlying the regulation of activin activity by Smad7 and the regulation of Smad7 expression at the transcriptional level. We will pursue the following specific aims: (1) To characterize the molecular mechanism by which Smad7 regulates activin signaling. We will determine if the interaction of Smad7 with activin type I receptor ALK-4 is required for the inhibitory activity of Smad7. We will use a series of structural mutants of Smad7 and ALK-4 to determine the interaction domains of these two proteins. Furthermore, we will examine the regulation of Smad7/ALK-4 interaction by the phosphorylation of the activin type I receptor. (2) To determine the regulatory effect of Smad7 on activin-mediated anti-proliferative activity. We will use hepatocytes and prostate cancer cells as a model system to determine the regulatory effect of Smad7 on the growth-inhibitory activity of activin in these cells. We will determine the mechanism underlying the activin-mediated regulation of cell cycle control machinery. We will then determine if ectopic expression of Smad7 is able to modulate this regulatory role of activin on these cells. (3) To determine the regulation of Smad7 transcription by activin signaling. We will determine if Smad7 mRNA is upregulated by activin in these cells. If activin were able to regulate Smad7 expression at the transcriptional level, we will characterize the promoter of Smad7 and identify the DNA element within the promoter that mediates the activin response. In conclusion, these studies would provide valuable information on the regulatory effect Smad7 on activin function at both the cellular and molecular levels.